How Stormpulse made more money on fewer customers

Imagine you have a web-based weather tracking service with hundreds of paying customers. Now imagine you realized those customers weren’t the ones you wanted for the long term, so you cut them off and then refocused your service aimed at a different market. For a bootstrapped startup, such a move is pretty gutsy, the equivalent of burning your ships, but that’s exactly what Stormpulse, a weather tracking service did.

Stormpulse in use at the White House.

Weather isn’t an easy business, but it’s always there.

Stormpulse, which offers an easy-to-read weather map and monitoring service, is a pretty cool product with A-list clients. The company not only has 200 enterprise customers, but the White House Situation Room has called the team when the service has gone down terms changed, wondering what was up. It’s a pretty sweet place for a five-year-old business that’s seeking its first round of funding to be in. Matthew Wensing, the CEO and co-founder of the Austin, Texas-based company, explains the company’s origins as a lucky connection between technology, weather data and media interest in tracking extreme weather.

“Weather isn’t a trend; it’s always happening,” Wensing says. He said he started working on the service in 2004 mostly because he was living in Chicago and his family lived in South Florida, which was experiencing an active hurricane season. He wanted an easy way to track storms, and the technology at the time was pretty limited. So he spent about three years gathering the data around weather and trying to build a site that made it easy to see where storms would hit by bringing in mapping data to the weather information. In Sept. 2006, he quit his day job to start a company around his tinkering.

Hurricane Ike stormed their servers.

In Sept. 2008, he got a break thanks to Hurricane Ike, because the Houston Chronicle and other news sites had put a Stormpulse widget on their web pages and panicked Houstonians clicked through for more info. At that time, he had more than 900 media customers running the free version of the widget asking only for a link back to the Stormpulse site in return.

During Ike, hits on the web site went from about 1,000 a day to 2 million hits from 1.2 million unique visitors on the day before the storm was set to hit. While free media users and consumers that were paying for $50 annual accounts were okay, they weren’t the big opportunity Stormpulse was after. Wensing noticed that some of those consumer accounts belonged to big business customers such as FedEx or the White House, and so in April of this year, the site abandoned its consumer accounts and decided to focus on businesses.

“The hypothesis was that a lot of those people paying for consumer accounts were actually businesses that would pay 10 times more for the service,” Wensing said. “We had just never asked them to before.”

Now Wensing’s trying to get enterprise customers to pay more and sign several of their different employees up for weather monitoring with the idea that giving several operations managers access to these alerts beats paying someone to sit around watching The Weather Channel all day and hoping that person notifies the right people under the right circumstances when relevant weather hits. Businesses from shipping to retail to utilities care about the weather, and Stormpulse wants to go deep among a variety of those verticals.

Big data needs a better UI.

Wensing won’t disclose revenue, but Stormpulse has become cash flow positive, and he says he wants to raise money so he can hire people to focus on more features and products to make Stormpulse that much better and more lucrative. “We have more inbound sales than we have time to field,” says Wensing. Currently, the company has six employees.

Despite the emphasis on weather data– the site consolidates information from 25 different data sources and nine weather agencies — it’s the user interface and experience that Wensing believes is Stormpulse’s competitive advantage. “Data is a nice little moat around the business, but the bigger moat is the UI experience around that data,” he said.

Sure, today it’s hard to get weather data, but efforts to bring open data to the government, plus the existence of data markets such as the ones offered by Microsoft or Infochimps, means that weather data may not always be a pain to collect. Wensing says Stormpulse’s advantage is in presenting that data in a context-aware way for the user. So someone in Canada sees a different version of the site than someone in Texas, and someone in the path of a hurricane gets that information presented first as opposed to local weather.

Plus, he adds that weather isn’t an easy place to get mass distribution in,”It’s not super easy to get The Weather Channel to acknowledge you, and use you in a massive way. That’s a hard problem for startups, and we already have the attention and the market.”

As for the future, he’s excited about building storm forecasting products and building out the infrastructure that means Stormpulse can launch its service on new platforms and operating systems as new devices and OSes hit the market. It already has an iPad app and expects the Android version to hit in a month or so.